Regional Support

If you are granted Regional Support, you make a special deduction from the employer contributions that you have calculated on compensation for work carried out at your permanent establishment in a development area.

Here's how to calculate and report Regional Support

When calculating employer contributions, you are entitled to deduct 10% from the contributions basis. The contributions basis is the amount of contributions-liable compensation for work carried out at your permanent establishment in a development area.

The maximum deduction amount is SEK 7,100 per month.

An employer contributions deduction must not reduce the contributions to a level lower than the pension contributions rate of 10.21%. This means that you are not entitled to Regional Support on compensation paid to employees who are aged 66 years or over at the beginning of the year.

You report the basis for Regional Support in box 471 of your PAYE return, and the deduction amount in box 476.

If a corporate group runs a business at a permanent establishment in a development area, the deduction must normally be made by the parent company. If the parent company cannot make the full deduction from its own compensation basis, it must decide how the deduction amount should be distributed among its subsidiaries.

A self-employed person who has employees may be entitled to a special deduction from both their employer contributions and their self-employed contributions. The maximum total deduction amount is SEK 85,200 per year.

Development areas

If your business has a permanent establishment in a development area, you might be entitled to Regional Support.

Employers that are not entitled to Regional Support

The following employers are not entitled to support, regardless of their activities:

• municipalities and regions
• government agencies and state-owned commercial enterprises
• registered religious organisations

Business activities that do not qualify for Regional Support

Business activities that are covered by special EU support provisions do not qualify for Regional Support. This applies to the following business activities:

• fisheries and aquaculture
  
• agriculture
  
• transportation

The relevant Swedish Standard Industrial Classification (SNI) codes may help you to check whether or not you are entitled to Regional Support. However, the determining factor is the actual business activity you carry out.

Agriculture includes all activities classified under SNI code groups 011-015. These include grain cultivation, milk and egg production, and reindeer herding, for example. Ancillary services, such as relief worker services, do not count as agriculture, and do therefore entitle a business to Regional Support.

Fisheries and aquaculture includes business activities classified under SNI code division 03.

Transportation includes rail transport (SNI code groups 491 and 492), other land transport (SNI code groups 493 and 494), sea transport (SNI code groups 501-504) and air transport (SNI code groups 511 and 512, except for code class 5122: space transport). If you provide transportation support services, such as travel agency services, you might be entitled to Regional Support if you run your business from a permanent establishment in a development area.

If you have received government support

Regional Support is a government subsidy that must fulfil the requirements to be considered “de minimis” aid (a subsidy of minor significance) according to EU regulations. You are only entitled to Regional Support if you have received no more than a total of EUR 300,000 in government subsidies over the past three years. (Please note that lower subsidy limits apply to some industry sectors.)

“De minimis” aid (Legal guidance in Swedish) External link.

You must report any “de minimis” aid you have received

If you have received de minimis aid, you must complete box 462 – “De minimis aid received” (“Mottagna stöd av mindre betydelse”). Report all the subsidies of minor significance that your business has received during the past three years. You must also state which government agency provided each subsidy, the amount(s) in question, and the year of payment. If your business has not received any de minimis aid, write this in the free-text box.

If you need additional space, you can submit your response by filling in our online contact form (below), or by sending us a letter.

Send us a message or submit a response

Post your letter to the Swedish Tax Agency at the following address:

Skatteverket

205 30 Malmö

Regional Support combined with R&D deduction

If you are entitled to an employer contributions deduction for R&D activities (“forskningsavdrag”) as well as Regional Support, you must first make the relevant deductions in accordance with the R&D deduction rules.

Employer contributions deduction for R&D activities (in Swedish)

Regional Support combined with Growth Support

Compensation for which you receive Growth Support must not be included in your basis for Regional Support.

Growth Support: special calculation of employer contributions